Real Estate Management DX Advancing with Cloud-based Real Estate Management Systems

In recent years, as the entire country has been promoting DX (Digital Transformation), the real estate industry has also been experiencing a wave of digitization. The property management process, which used to be paper- and Excel-based, is undergoing a major transformation through the use of cloud-based property management systems. Property information, tenant data, contract information, and rent income/expenses can be centrally managed in the cloud, and many complicated tasks can be automated, leading to increased operational efficiency and accuracy. This article provides an easy-to-understand explanation of the benefits of cloud-based management systems for property owners in terms of automating rent management and income/expense reporting, making information more visible, and speeding up communication. In addition, actual case studies and major cloud-based property management systems available in Japan will also be introduced.

Improving operational efficiency by automating rent management and income/expense reporting

In rental management, managing monthly rent payments and income/expense reports are time-consuming and labor-intensive tasks for owners. By introducing a cloud-based property management system, these rent management tasks can be greatly streamlined and automated. For example, once property and contractor data is registered, the data is automatically reflected in various documents such as invoices and remittance statements, eliminating the need for double entry. Some systems are equipped with an automatic notification function for rent arrears, which automatically sends a reminder when payment is overdue, reducing the need for the owner to contact the company himself for a reminder. In fact, a small to medium-sized management company has succeeded in reducing the time required for rent payment confirmation and delinquency management by about 40% by automating these tasks. This leads to significant time savings for the owner.

The system also streamlines income/expense reporting through the use of the cloud. In the past, owners had to wait for monthly income/expenses reports to be mailed from the management company or calculate income/expenses themselves in Excel. The cloud system automatically generates a monthly income/expenses report from daily deposit and withdrawal data. The report shows the income/expenses status visually and clearly with graphs, so owners can grasp the details at a glance. Since paper mailing is no longer required, the paperwork and costs associated with mailing preparation and delivery can be eliminated. This automation is also effective in reducing human error and preventing data entry errors. The number of manual entry errors is reduced, and the integrity of the ledgers is maintained, thus improving the accuracy of management figures. As a result, owners will be able to spend more time on other important tasks and strategic planning instead of accounting.

Improved transparency and decision-making support realized through centralized management and visualization of information

Cloud-based property management systems centrally manage all relevant information, from property information to contract details, rent deposit and withdrawal history, and repair history. This allows owners to grasp the status of their real estate portfolio in real time, and to "visualize" their business situation. For example, information such as which properties have not received rent this month, annual income and expense trends, and how many units are vacant in which properties can be instantly confirmed on the dashboard. The timely visualization of information increases transparency in real estate management and provides peace of mind for owners. In fact, some companies have actually been able to improve their ability to respond quickly by enabling real-time information sharing among multiple stores through cloud computing.

The cloud management system for owners graphs key indicators such as rent income, expense breakdown, and vacancy rates, which can be viewed anytime, anywhere. For example, one individual owner was able to improve profitability as a result of being able to analyze the income and expenses of each property in detail on the system, and to identify management issues and take countermeasures. By accumulating and visualizing data in this way, decision-making based on objective numerical values becomes possible. Furthermore, in recent years, AI analysis functions have been incorporated into systems to support decision-making. For example, a service equipped with an AI-based rent assessment function allows users to receive suggestions for appropriate rents based on the latest market rates and trend data.

Strengthening Relationships of Trust through Prompt Communication

Communication between owners and property management companies, or between owners and tenants, is also greatly facilitated by DX. Cloud-based property management systems often integrate chat and notification functions, so that communications that were previously handled by phone or mail can be exchanged quickly online. For example, the management company can immediately notify the owner of a communication (e.g., confirmation of lease renewal or request for approval of repairs) through the system, and the owner can accept or reply with a single click on a smartphone or PC. This eliminates the hassle of sending and receiving documents by mail and reduces the burden of responding to each request. In fact, as a result of sharing reports online on the cloud system and allowing communication to be completed via chat, owners are now able to check and reply to information at their convenient time, and the management company has seen a reduction in wasteful phone calls, such as non-delivery and waiting for a call back. Since all communication records are stored in the cloud, misunderstandings such as "I didn't hear what you said" and "I didn't say what I said" can be prevented, leading to improved trust between the two parties.

DXing is also speeding up the process of dealing with tenants. Residents can easily report problems or ask questions about facilities through a dedicated resident application or web portal, and management can immediately provide feedback on the status of the response. Some management companies have introduced chatbots and automated response systems that enable initial response even after business hours, allowing them to respond immediately to tenant inquiries during the night and on weekends. Such a prompt communication system leads to higher tenant satisfaction, which in turn contributes to long-term stable operation of the owner's property (retention of tenants and reduction of vacancies).

Major Advantages for Owners

As we have seen above, DXing with a modern property management system brings many benefits to property owners. Let us reiterate the main benefits.

• Significant time savings and increased productivity: Owners spend significantly less time on administrative tasks such as rent management and bookkeeping, as these tasks are automated. Even if the management company is DXed, this will lead to a reduction in overtime and manpower shortages, which in turn will improve the quality of service provided to owners.

• Increased transparency and strengthened trust: Data is shared in the cloud in real time, allowing owners to keep track of their assets at all times. The openness of information regarding income, expenditures, and contracts eliminates concerns about not knowing what is going on, and strengthens the relationship of trust with the management company. Since data is stored in the cloud and history is kept, omissions and loss of information are also prevented. In fact, some of our clients have commented that the centralized management of data has improved the transparency of management.

• Support for accurate management decisions: The data and reports accumulated in the system, as well as the results of AI analysis, provide powerful support for owners in their decision-making. By looking at real-time performance data, owners can compare the profitability of different properties and make data-driven decisions on how to review rent levels. For example, the AI assessment function may be able to calculate an appropriate rent for a property that continues to have vacancies, and make a decision on how to leverage the property at an early stage. The DX system is also useful for long-term asset management planning, as it makes it easier to forecast future income and expenditures based on accumulated data.

• Reduced costs and enhanced compliance: The use of the cloud will help you go paperless, reducing mailing, printing, and other costs. In addition, if the system is constantly updated with the latest laws and regulations, it is easier to respond to changes in laws and regulations, such as revisions to contract forms and the digitization of explanations of important matters. Combined with a reduction in human error, this will help prevent problems and strengthen compliance. In the event of a system failure or disaster, the cloud-based system has the advantage of high business continuity as data is safely backed up (the risk of a prolonged outage is said to be lower than with on-premise systems).

Major Cloud-based Property Management Systems in Japan

Finally, we introduce some of the major cloud-based property management systems available in Japan. All are designed to help improve the efficiency of property management operations. Please refer to them when considering their introduction or when making proposals to property management companies.

• Ierabu CLOUD (Ierabu GROUP Inc.) - An all-in-one cloud system that covers all aspects of real estate operations from leasing and sales brokerage to property management. It has been installed by more than 12,000 companies and offers a wide variety of functions. The system is fully equipped with functions such as website creation, portal site linkage, customer management, and electronic contracting, contributing to both increased operational efficiency and enhanced ability to attract customers.

• Iiseikatsu Rental Management Cloud (Iiseikatsu Co., Ltd.) - One of the leading cloud services for the real estate industry, this system provides comprehensive support for property management, lease contracts, deposit and withdrawal management, and more than 1,500 companies have installed it, and it is highly regarded for its ease of use and multifunctionality. The system has been introduced to more than 1,500 companies and is highly regarded for its ease of use and versatility. The system has a support system that includes updates to comply with changes in the law, so you can use it with peace of mind.

• Rental Revolution 10 (Japan Information Create Co., Ltd.) - This popular rental management system has been introduced to approximately 5,000 companies (4,941 companies) nationwide. The system can handle everything from rental brokerage to management, and centralizes management of property information, contract details, and rent data to improve operational efficiency. With an interface that is easy for anyone to use and excellent support, the system is highly supported by small and medium-sized real estate companies.

It is advisable to select the most suitable system according to the scale and needs of your company. In addition to cost-effectiveness, ease of operation, support system, and compatibility with your company's workflow are also important. In some cases, it is recommended to proceed with DX implementation without difficulty, while implementing the system in stages and providing training to employees.

Conclusion

We have explained the DX (digital transformation) of property management operations using cloud-based property management systems, focusing on the effects of streamlining and automation and the benefits it brings to owners. The benefits of DX are wide-ranging, including time savings through automation of rent management and income/expense reporting, improved transparency and decision-making support through data visualization, and stronger relationships of trust through faster communication. Actual case studies have also reported significant reductions in work hours and improved profitability, which is a point that owners should not overlook.

With the development of real estate tech, property management, which once relied on labor and experience, has evolved into an easy-to-use cloud service that can be handled by anyone, freeing up the owner's time and mind to focus on strategic tasks and measures to increase property value. In other words, the latest property management systems are becoming more than just a tool for improving operational efficiency; they are becoming a management partner for owners, supporting their decision-making.

If you are an owner who would like to promote DX in property management, please refer to the advantages and case studies introduced in this article and take the first step toward digitization from a familiar place. Even if it is a small step at first, continuous promotion of DX will bring about great results (time savings, improved profits, reduced risks, etc.) in the future. Why not consider implementing an appropriate cloud-based management system to make your busy daily work a little easier and to make your real estate management more secure and transparent? You will surely feel the benefits.